Solved by verified expert :1. On January 1, 2013, Daniels Corporation issued $5,000,000, 10-year, 8% bonds at 103. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2013 isa. Cash 5,000,000Bonds Payable 5,000,000b. Cash 5,150,000Bonds Payable 5,150,000c. Premium on Bonds Payable 150,000Cash 5,000,000Bonds Payable 5,150,000d. Cash 5,150,000Bonds Payable 5,000,000Premium on Bonds Payable 150,0002. Levin Company issued 500 shares of no-par common stock for $5,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?a. Cash 5,500Common Stock 5,500b. Cash 5,500Common Stock 1,000 Paid-in Capital in Excess of Par 4,500c. Cash 5,500Common Stock 1,000Paid-in Capital in Excess of Stated Value 4,500d. Common Stock 5,500Cash 5,5003. Motes industries owns 45% of Newton Company. For the current year, Newton reports net income of $250,000 and declares and pays a $60,000 cash dividend. Which of the following correctly presents the journal entries to record Motes’ equity in Newton’s net income and the receipt of dividends from Newton?a. Dec. 31 Stock Investments 112,500Revenue from Stock Investments 112,500Dec. 31 Cash 27,000Stock Investments 27,000b. Dec. 31 Stock Investments 112,500Revenue from Stock Investments 112,500Dec. 31 Cash 60,000Stock Investments 60,000c. Dec. 31 Stock Investments 85,500Revenue from Stock Investments 85,500Dec. 31 Cash 27,000Stock Investments 27,000d. Dec. 31 Revenue from Stock Investments 112,500Stock Investments 112,500Dec. 31 Stock Investments 27,000Cash 27,0004. Talbot, Inc. has the following income statement (in millions):Wilkinson, INC.Income StatementFor the Year Ended December 31, 3Net Sales $300Cost of Goods Sold 120Gross Profit 180Operating Expenses 44Net Income $136Using vertical analysis, what percentage is assigned to Cost of Goods Sold?a. 30%b. 40%c. 100%d. None of the above5. Mah, Inc. completed Job No. B14 during 2013. The job cost sheet listed the following:Direct materials $55,000Direct labor $30,000Manufacturing overhead applied $20,000Units produced 3,000 unitsUnits sold 1,800 unitsHow much is the cost of the finished goods on hand from this job?a. $105,000b. $63,000c. $42,000d. $51,0006. In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June werea. 90,000 equivalent units.b. 100,000 equivalent units.c. 104,000 equivalent units.d. 80,000 equivalent units.7. A company budgeted unit sales of 204,000 units for January, 2013 and 240,000 units for February, 2013. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month’s budgeted unit sales. If there were 61,200 units of inventory on hand on December 31, 2013, how many units should be produced in January, 2013 in order for the company to meet its goals?a. 214,800 unitsb. 204,000 unitsc. 193,200 unitsd. 276,000 units8. A company’s planned activity level for next year is expected to be 200,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:Variable Fixed Indirect materials $280,000 Depreciation $120,000Indirect labor 400,000 Taxes 20,000Factory supplies 40,000 Supervision 100,000A flexible budget prepared at the 160,000 machine hours level of activity would show total manufacturing overhead costs ofa. $576,000.b. $720,000.c. $768,000.d. $816,000.9. A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound. Last month, 1,500 pounds of direct materials were purchased for $5,700. The direct materials price variance for last month wasa. $5,700 favorable.b. $300 favorable.c. $150 favorable.d. $300 unfavorable.10. In incremental analysis,a. costs are not relevant if they change between alternatives.b. all costs are relevant if they change between alternatives.c. only fixed costs are relevant.d. only variable costs are relevant.?Problem 1:Here are comparative balance sheets for Hayes Company.Hayes CompanyComparative Balance SheetsDecember 31, 2013Assets 2013 2012Cash $ 43,000 $ 10,000Accounts receivable 18,000 14,000Inventories 25,000 18,000Prepaid expenses 6,000 9,000Long-term investments 0 18,000Equipment 60,000 32,000Accumulated depreciation—Equipment (20,000) (14,000)Total assets $ 122,000 $ 87,000Liabilities and Stockholder’s EquityAccounts payable $ 17,000 $ 7,000Bonds payable 37,000 47,000Common stock ($1 par) 40,000 23,000Retained earnings 28,000 10,000Total liabilities and stockholder’s equity $ 122,00 $ 87,000Additional information:1. The 2013 Income Statement reported $6,000 in depreciation expense, a $4,000 loss onsale of investments and Net income of $43,000.2. Cash dividends of $15,000 were declared and paid.3. Long-term investments that has a cost of $18,000 were sold for $14,0004. Sales for 2013 were $120,000.Instructions: Prepare a statement of cash flows for 2013 using the indirect method.Hayes CompanyStatement of Cash FlowsFor the Year Ended December 31, 2013Adjustments to reconcile net income to net cash provided by operating activities Problem 2:Doherty Corporation is projecting a cash balance of $31,785 in its December 31, 2013, balance sheet. Doherty schedule of expected collections from customers for the first quarter of 2013 shows total collections of $189,885. The schedule of expected payments for direct materials for the first quarter of 2013 shows total payments of $40,200. Other information gathered for the first quarter of 2013 is: sale of equipment $3,392; direct labor $70,178, manufacturing overhead $34,583, and purchase of securities $12,372. Selling and administrative expenses are projected to be $45,117; this figure includes $1,117 in depreciation expense on the office equipment. All costs and expenses will be paid in cash. Doherty wants to maintain a balance of at least $30,000 cash at the end of each quarter.Instructions: Complete the cash budget for the first quarter.Doherty CorporationCash BudgetFor the Quarter Ending March 31, 2013Problem 3Delaney Corporation has the following cost records for February 2013.Indirect factory labor $ 4,612 Factory utilities $ 601Direct materials used 22,361 Depreciation, factory equipment 1,585Work in process, 6/1/12 2,769 Direct labor 31,084Work in process, 6/30/12 3,733Maintenance, factory equipment 1,792Finished goods, 6/1/12 4,609 Indirect materials 2,268Finished goods, 6/30/12 7,429 Factory manager’s salary 3,315Instructions: Prepare a cost of goods manufactured schedule for February 2013.Delaney CorporationCost of Goods Manufactured ScheduleFor the Month Ended June 30, 2013Manufacturing overhead:Problem 4:Wallace Corporation has 72,615 shares of common stock outstanding. It declares a $2.10 per share cash dividend on August 1 to stockholders of record on September 15. The dividend is paid on October 31.Instructions: Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend.Date Account Description Debit CreditProblem 5:Hawkins Manufacturing incurs unit costs of $7.90 ($6.10 variable and $1.80 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 12,000 of the assembly part at $5.75 per unit. If the offer is accepted, Hawkins will save all variable costs but no fixed costs.Instructions: Prepare an analysis showing the total cost savings, if any, Hawkins will realize by buying the part.Make BuyTotal annual cost Hawkins Company should _______________ the part because total annual costs tomake are less than total costs to buy.Problem 6On July 1, Ketel Corporation purchases 500,000 shares of its $6 par value common stock for the treasury at a cash price of $10 per share. On September 1, it sells 275,000 shares of the treasury stock for cash at $13 per share. The balance in the retained earnings account is $6,345,000.Instructions: Journalize the two treasury stock transactions.Date Account Description Debit CreditProblem 7:Reed Company has a unit-selling price of $500, variable costs per unit of $269, and fixed costs of $265,580.Instructions: Compute the break-even point in units using either (a) the mathematical equation or (b) contribution margin per unit. Round answer up to the next whole unit.Problem 8:Lopez Company has a factory machine with a book value of $89,851 and a remaining useful life of 4 years. A new machine is available at a cost of $325,275. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $630,925 to $425,840.Instructions: Prepare an analysis showing whether the old machine should be retained or replaced.Retain Equipment Replace EquipmentTotal costsThe equipment should be _______________ because total costs are lower than to retain the machine.Problem 9:For Mathers Company, variable costs are 68% of sales, and fixed costs are $215,000. Management’s net income goal is $68,610.Instructions: Compute the required sales needed to achieve management’s target net income of $78,610.
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